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What Exactly is Nonprofit?

Two weeks ago I was really sick. It took me some time but I finally found a local doctor that had an appointment slot for me and took my insurance. I have PPO from Blue Cross/Blue Shield. It turns out, this doctor is near my old work, and in one of the Sansum Medical Foundation buildings. Sansum is a nonprofit organization. When I got to the office, I spoke to the receptionist, gave them my insurance card, and gave them $20 cash for the co-pay. I met with the doctor for less than 10 minutes and was on my way with an antibiotics prescription. Yesterday, I received a bill from Sansum with a charge of about $135. So my total 10 minute vist cost $155. I have to verify, but I am pretty sure I can just ignore the bill and my insurance company will pay for it. Regardless, Sansum is getting $930 an hour.

This got me thinking. What exactly is nonprofit? If Sansum made $930 an hour from just one patient, then used up $930 to pay off all their doctors and staff, and maybe used the little bit left over for an operating costs fund (basically, side emergency money), then could they claim nonprofit? If I owned a business and made a million dollars and took that home as salary, it wouldn’t be profitable, right?

Why would a doctor work in a non-profit? Just to be nice and charitable? That’s the thing though, I don’t know what Sansum does that’s considered charitable. I have never received free service there. I’ve been there twice now. I do see what seem like poor peopel there, but I also see people from all walks of life as well. From the website, they speak often about being a 501(c)(3), which is the taxcode for a nonprofit. I can’t find any mention of free vacinations, free medicine, or free evaluations. I have seen flyers of education programs where one of the doctors will talk about something like weight loss to a class of 20 students (maximum). I think a doctor making $500 an hour or whatever, could at least do this. I also don’t think he needs Sansum to do it. Why not do it in a for-profit office?

Today, Ted sent me an article about Catholic monks in Wisconsin that are running an ink toner business called Since starting their online store 3 years ago, they have grown to a $2.5M in sales. The article clearly states that the store is a for-profit business. But it also talks about what they use the money for – upkeep of their buildings and grounds, charities, and orphanage support. I don’t think the monks are pocketing any of the money. Yet, they are considered for-profit.

So what’s the deal?

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